What do you understand by rate of markup on cost and rate of markup on selling price, illustrate with suitable examples?

Q: What is target costing and how is it different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: What is the difference between price and cost? Is there any relation connected them? Which one is…

A: PRICE  1. Price is what you pay for purchasing goods or availing the services. Also called sale…

Q: Why does Sales discounts are variable consideration?

A: Variable considerations: Variable consideration refers to the amount that the corporation is…

Q: Define the term price-takers.

A: Price takers is the term used for individual or a company which cannot influence the price of a…

Q: How does the lower of cost or market relate to profit margins?

A: Answer: The lower cost or market implies that, depending on how historical costs and market costs…

Q: What is a transfer price? What are the three main approaches to setting transfer prices?

A: Transfer pricing:   Transfer pricing refers to the setting of prices for goods and services that are…

Q: Explain the difference between price-takers and price-setters.

A: When a company cannot dictate prices then it is known as price taker. On the contrary, when a…

Q: Under what circumstances is relative sales value anappropriate basis for determining the price…

A: Relative sales value is an appropriate basis for pricing inventory when a group of changing units is…

Q: What is a price standard?

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: How is standalone selling price defined?

A: Performance Obligation: Performance obligation refers to the obligation that the seller to provide…

Q: How is target costing different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: Distinguish between market-skimming pricing and market-penetration pricing.

A: Product pricing strategies: There are two product pricing strategies of a company. They are,…

Q: On what concept is the price-earnings multiple valuation approach based?

A: Price earning ratio is computed by dividing the market price of the share by the earnings per share.

Q: How much is the total cost of goods available for sale?

A: solution given Purchases 1264500 Purchase return and allowances 39725 Freight in…

Q: How do you compute the unadjusted cost of goods sold?

A: Cost of Goods Sold: Once the product is manufactured, that product is delivered to customers. The…

Q: Determining the best approach to pricing requires a cost-benefit trade-off. Explain.

A: The best approach to pricing requires the cost benefit trade-off is explained as below, The Best…

Q: What does the price earning ratio indicate?

A: Price to earnings ratio (P/E ratio) compares the price with earnings per share. It will be…

Q: Which of the following is the correct calculation of rate of mark-up on selling price? a.…

A: Rate of Markup on Selling Price:-Sales price minus the unit cost that divides that number of unit…

Q: WHAT IS THE COST OF SALES?

A: Cost of sales in the business means all costs that are directly incurred for the manufacturing of…

Q: Define what net sales?

A: Net sales means the amount of revenue earned from selling the goods or services in which business…

Q: Which of the following transfer price approaches is used when the transfer price is set at the…

A: Transfer Price  : Price at which related parties transact with each other is known as transfer…

Q: how is the selling price computed

A: Formula: Selling price=Cost100%-Gross profit ratio

Q: Explain how negotiation between the supplying and buying units may be used to set transfer prices.…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Discuss the difference between the revaluation model and cost model in detail.

A: Revaluation model and cost model are two different models of subsequent measurement of invested…

Q: Give the solution: How much is the total cost of goods sold?

A: For an investor or other stakeholders, income statement or statement of profit or loss is an…

Q: A cost - based transfer price considers the cost of producing the goods when determining the price.…

A: At the time of determining the prices of the goods, the cost of goods-producing is required to be…

Q: What is the formulae used to find markup price?

A: Markup price is the price that the player comes up with after adding the mark up to the cost price…

Q: How sensitive is the NPV to changes in the quantity sold?

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: e selling price per unit?

A: Total sales revenue = Fixed expenses + Total variable expenses + Profit Given that, Fixed expenses =…

Q: Explain price/EBITDA ratio

A: The EV/EBITDA ratio compares a company's enterprise value to its earnings before interest, taxes,…

Q: What is a cost-volume-profit analysis?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: what is the cost of sales?

A: Cost of sales are the cost incurred for producing the goods which is sold. The concept related to…

Q: What is the role of Cost Accounting in Price Determination ?

A: The primary difference between fixed as well as variable costs is made in cost accounting.…

Q: Define Selling profit.

A: Net income: Net income is the excess amount of revenue that arises after deducting all the expenses…

Q: Explain the difference between target price and target cost.

A:

Q: Explain the following assertion: “Price setting generally requires a balance between market forces…

A: Businesses have to make a lot of decisions in running a business one of which is price setting. They…

Q: Describe the approaches to estimate stand-alone selling prices.

A: